A Week On the Market (06/01 - 06/07): Lots Of Statistics And Central Banks

A Week on the Market (06/01 - 06/07): Lots of Statistics and Central Banks

Views: 18  
Reading time: 3 min



At the beginning of July, investors are unlikely to get bored - to tell you the truth, they have had no chance to get bored this whole year. On the macroeconomic calendar this week, there are more statistics than the market can work off; meanwhile, the sessions of Central Banks, the ECB being the leader, may provide us a clearer understanding of the future.

EUR: the ECB and other data

EUR: the ECB and other data

At the beginning of the week, the Eurozone has already issued the statistics of business activity, and the data has been no surprise. The statistics of unemployment is yet to follow. Last time, the indicator amounted to 7.4% but these days it may grow to 7.5-8% depending on how bad the European business feels. By the way, as for employment in Europe: the European Commission representatives admit that the business needs no less than 730 billion euro of investments, otherwise millions of people will flood the labor market. The scale of trouble is impressive, even though European countries, individually and together, started action ar the first signs of a crisis. All in all, the better the digits and the more confident the rhetoric, the better for the EUR.

USD: time to calculate employment in the US

USD: time to calculate employment in the US

As always at the beginning of the month, markets are focused on the employment statistics in May. The forecasts are far from cheerful: the unemployment rate might have grown to 19.6%, which is a gloomy perspective. In April, the unemployment rate secured at 14.7%, and even then the scale looked scary. The number of non-farm payrolls in May may have fallen by 1 million places, while a month before it shrunk by over 2 million. In reality, the digits might be even more frightening; however, we know very well that the USA will employ their jobless as soon as the quarantine is over. For now, the USD is clearly depressed.

AUD: attention to the RBA

AUD: attention to the RBA

The season of the summer sessions of Central Banksstarts off with the meeting of the Reserve Bank of Australia on Tuesday, June 2nd. The interest rate here is 0.25% per annum and unlikely to change: it is already at its minimum, while the RBA repeats that it keeps an eye on the situation and is ready to support the economy if necessary. Any optimistic remarks of the RBA will support the AUD, however, any negative events will influence it as well.

The ECB may enhance stimulation

The ECB may enhance stimulation

The European Central Bank is preparing for another session. It is planned for Thursday, June 4th. While the interest rate is no question - it remains at zero - with the stimulation measures things are not so clear. Last week, the head of the ECB Christine Lagarde threatened markets with another forecast of the decline of the European GDP in 2020: while the previous prediction was 5-12%, the current forecast of 8-12% is worse.

Simultaneously, Lagarde assured markets that the ECB was ready to further support the economy of the reason. The signal was unequivocal, so we expect the ECB to announce, for example, an extension of the program of buying back assets. This would support the European economy on the state and corporate levels. The activity of the ECB is good for capital markets.

The Bank of Russia: time to decrease the rate

The Bank of Russia: time to decrease the rate

On Friday, June 5th, the head of the Bank of Russia Elvira Nabiullina will give a press conference. This is unlikely to be the current reason for a decrease in the interest rate: the decrease is most probable to happen as planned, at the session in June, by 100 base points at once. However, now Nabiullina may make it clear, how the CB will react to inflation, the situation inside the financial system, and what will be the next steps to be taken about the interest rate. The more confident these signals, the better for the RUB.




Comments

Previous article

Shooting Pips: Trading the Sniper Strategy

Today, there are plenty of trading strategies and work options for various markets both with indicators and without them. The Sniper strategy belongs to the second group: it consists of chart analysis solely, involving no additional indicators.

Next article

Hertz Files for Bankruptcy: What to Do With Stocks?

Today, I will speak about a victim of COVID-19: the largest US car rental company owning over 750,000 cars - Hertz Global Holdings, Inc. (NYSE: HTZ).